New study: No correlation between school spending and student outcomes

There is no statistically significant correlation between how much money Michigan’s public schools spend and how well students perform academically, according to a new empirical study by the Mackinac Center for Public Policy and an assistant professor of economics at the University of Colorado-Colorado Springs.

The study’s findings align with the bulk of academic research on the subject, but does so with a unique and detailed data set of Michigan’s public school spending and academic achievement. The data comes from more than 4,000 individual public schools in Michigan and covers seven years’ worth of detailed expenditures and test scores for elementary, middle and high school students. The test scores were from the years 2007 through 2013. Using school-level data, as opposed to district-level data, enabled a more precise examination of the relationship between spending and performance.

“Of the 28 measurements of academic achievement studied, we find only one category showed a statistically significant correlation between spending and achievement, and the gains were nominal at best,” said Mackinac Center Education Policy Director Ben DeGrow, who authored the study along with Edward C. Hoang, a professor of economics at the University of Colorado at Colorado Springs. “Spending may matter in some cases, but given the way public schools currently spend their resources, it is highly unlikely that merely increasing funding will generate any meaningful boost to student achievement.”

The study comes as the state awaits the completion of a now-overdue school funding “adequacy” study it paid a Denver-based firm $399,000 to complete by March 31, 2016; that study is now due by May 13, 2016. School funding adequacy studies are common across the country and nearly all of them (38 of the 39 performed between 2003 and 2014) recommend funding increases.

“The state’s school spending adequacy study is sure to conclude additional tax dollars are necessary to improve student performance to adequate levels, but lawmakers, parents and the Michigan Department of Education owe it to students to examine how education dollars are spent, rather than simply throwing more money to areas that do not directly impact the classroom,” DeGrow said. “As our findings suggest, it could be that public schools generally fail to spend additional resources effectively.”

The only area that showed a statistically significant correlation between additional spending and student achievement was seventh-grade math, and the impact was small: a school would need to spend on average 10 percent more to improve the average state test score by just .0574 points. “This study suggests that simply spending more of Michigan taxpayers’ dollars on the public school system alone is not enough to improve student achievement,” said Hoang.

Read the full studyhttp://www.mackinac.org/22332.

(Chantal Lovell is Media Relations manager at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland.)